"Following information is available of XYZ Limited for quarter ended June, 20XX
Fixed cost Rs 5,00,000
Variable cost Rs 10 per unit
Selling price Rs 15 per unit
Output level 1,50,000 units
What will be amount of profit earned during the quarter using the marginal costing technique?"
A. Rs 2,50,000
B. Rs 10,00,000
C. Rs 5,00,000
D. Rs 17,50,000
Answer: Option A
Sales - VC -FC = ( 1,50,000 x15) - (1,50,000x10)- 5,00,000 = 2,50,000
Cost = 50,000+ (10×1,50,000) {fixed + variable}
=2,00,000
SP= 15×1,50,000
=22,50,000
Profit = SP- COST = 2,50,000